A technology company announces a goal of increasing recycling programs by 30% and reducing company carbon emissions by 50% by 2040. A climate risk analyst at the company develops a sustainability framework and identifies ways to measure company-level transition and physical risks.
Which of the following should the analyst use to measure company-level transition risk?
Corporate alignment scores measure how well a company's strategies and actions align with broader sustainability goals and regulatory frameworks. These scores assess the extent to which the company is transitioning towards lower carbon emissions and other sustainability targets, making them the appropriate metric for evaluating company-level transition risk.
6.5.1“But transition risk is not only about current emissions but also about whether companies have solid and credible plans to reduce emissions in the future and to ultimately align their corporate emissions trajectories with national and international goals, such as alignment with the Paris Agreement 2°C target or the target of net-zero emis-sions by 2050. Various approaches seek to measure the degree of corporate alignment. ”